Treasuries Pull Back Off Mid-Day Highs To Close Little Changed

Treasuries moved modestly higher over the course of the morning and early afternoon before giving back ground going into the close of trading on Wednesday.

Bond prices pulled back well off their mid-day highs, ending the session nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.722 percent after hitting a low of 0.709 percent.

Treasuries reached new highs for the session following comments from Treasury Secretary Steven Mnuchin offsetting recent optimism about a new stimulus bill.

In remarks to the Milken Institute Global Conference, Mnuchin said getting something done on a new stimulus bill before the election “would be difficult.”

“We continue to make progress on certain issues, but on certain issues we continue to be far apart,” Mnuchin said about negotiations with House Speaker Nancy Pelosi,

Ahead of Mnuchin’s remarks, Pelosi’s deputy chief of staff Drew Hammill said the Speaker and Mnuchin had a “productive” phone call earlier this morning.

“One major area of disagreement continues to be that the White House lacks an understanding of the need for a national strategic testing plan,” Hammill said on Twitter.

He added, “The Speaker believes we must reopen our economy & schools safely & soon, & scientists agree we must have a strategic testing plan.”

Hammill noted Pelsoi and Mnuchin would speak again on Thursday, although the Treasury Secretary’s comments have partly offset optimism the negotiations will bear fruit.

In U.S. economic news, the Labor Department released a report showing producer prices increased by more than expected in the month of September.

The Labor Department said its producer price index for final demand climbed by 0.4 percent in September after rising by 0.3 percent in August. Economists had expected prices to edge up by 0.2 percent.

The report said food prices jumped by 1.2 percent in September after decreasing by 0.4 percent in August, while energy prices fell by 0.3 percent after dipping by 0.1 percent.

Excluding food and energy prices, core producer prices still rose by 0.4 percent in September, matching the increase seen in the previous session. Core prices were also expected to inch up by 0.2 percent.

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, regional manufacturing activity and import and export prices.

Source: Read Full Article